Supreme Court Considers Whether IRS Has to Return Payment Made by Insolvent Company

Lower courts found that the IRS, like any other creditor, is not entitled to keep a fraudulent transfer.

The U.S. Supreme Court in Washington, on Dec. 2, 2024. Madalina Vasiliu/The Epoch Times

The U.S. Supreme Court considered this week whether state and federal law permit a bankruptcy trustee to take back a payment made to the IRS that may have been fraudulent.

A bankruptcy trustee is appointed by a court to administer a debtor’s estate in a bankruptcy proceeding. The trustee stays apprised of the debtor’s financial condition, collects assets, and distributes money to creditors.